Announcement of Philippines to Expand and Upgrade Telephone Network on October 7, 1992

FOR IMMEDIATE RELEASE WorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 IBRD News Release No. 93/21-Asia Contact: Erin Burns (202)458-2210 External Affairs - EAPVP PHILIPPINES TO EXPAND AND UPGRADE TELEPHONE NETWORK Project Targets Provincial Areas Washington, D.C.,. October 7, 1992 --- A World Bank loan of $134 million will support expansion--of the telecommunications network predominantly in provincial areas of the Philippines. Telephone facilities will be extended and improved in 128 municipalities deemed areas of potentially major economic importance. Telecommunications is one of the least developed infrastructure sectors in the Philippines and the telephone sub-sector is most in need of expansion and upgrading. A nationwide telephone density in 1986 of 1 line per 100 people was among the lowest of the ASEAN countries. Outside of the capital city Manila, telephone density was 0.3 per 100 people. Waiting lists for telephone service average between 3 and 5 years. Aging equipment and overloaded services result in sub-standard quality as well. The loan, made to the Development Bank of the Philippines (DBP), will be re-lent through a banking syndicate to the Philippine Long Distance Telephone Company (PLDT), a private company which provides service to about 90 percent of the country's 625,000 working lines. It will help finance a project to address the problems in the sector. The Telephone System Expansion Project includes the provision of 133,000 lines of exchange and related equipment, which will support new telephone services in 53 unserved municipalities in 9 provinces, and expand existing capacities. A second component will install about 97 public calling offices in unserved municipalities in 10 provinces. Six isolated exchanges will also be interconnected, providing access to national and international telephone service. While improved telephone access and quality will benefit the population as a whole, the project is specifically aimed at offsetting the imbalance in telephone service between major cities and provincial areas. The 128 municipalities targeted by the project also offer particularly high returns from infrastructure investments. Access to modern telecommunications services is expected to stimulate investment and growth and increase market efficiency between provincial communities, as well as between these communities and major cities. The total cost of the project is approximately $288 million. PLDT is providing the remaining $154 million in project financing. NOTE: Money figures are expressed in U.S. dollar equivalents.